Inclusive market strategies could transform SA’s fresh produce sector

©William Perugini via 123RF

The fresh produce sector stands at a critical crossroads. While it remains an engine of economic vitality and nourishment for the nation, it also starkly reflects persistent inequalities.

Large-scale commercial farms continue to dominate, yet many small-scale black farmers face systemic barriers that limit their access and growth.

Despite its vast potential for driving inclusive economic growth, food security, and employment, the sector’s viability is threatened by deep-rooted structural challenges.

Systemic barriers facing emerging farmers

The challenges confronting emerging farmers are deeply embedded in dynamic systemic impediments and structural issues that are multifaceted. Among the most urgent concerns are the multilayered barriers to entry that these farmers face.

Access to suitable land and affordable financing remains a critical obstacle. Without sufficient capital, many aspiring farmers find it impossible to invest in essential inputs such as quality seeds, fertilisers, and modern equipment. This financial limitation not only restricts their productivity but also hinders their ability to compete effectively in the marketplace.

Market access is another significant hurdle that many small-scale and emerging-scale commercial farmers struggle to overcome. These farmers often find themselves sidelined from formal supply chains dominated by large retailers and wholesalers.

The stringent quality and certification standards imposed by these large entities can be overwhelming, leaving many small farmers unable to meet the required benchmarks.

As a result, they become increasingly marginalised and excluded from lucrative market opportunities. The power dynamics within the agricultural sector tend to favour large buyers, effectively stripping small producers of their bargaining power and further entrenching their economic vulnerability.

Infrastructure and post-harvest losses

Infrastructure deficiencies further exacerbate the challenges faced by emerging farmers. Inadequate storage facilities and poorly developed transportation networks lead to substantial post-harvest losses, which not only diminish farmers’ income but also discourage future investment in their operations.

The lack of reliable infrastructure creates a detrimental cycle characterised by low productivity and limited market participation, trapping these farmers in a state of perpetual struggle.

Moreover, anti-competitive practices within the agricultural sector distort the market landscape.

Market concentration, where a handful of large entities control a significant share of the market, can result in price-fixing and other exclusionary behaviours. Such practices stifle innovation and limit consumer choice, collaterally undermining the viability and sustainability of small-scale farming operations.

Addressing these interconnected challenges requires a concerted effort from all stakeholders, including government, private sector actors, and civil society organisations.

By advocating for policy changes that promote equitable access to resources, improving infrastructure, and fostering a more inclusive market environment, we can work towards empowering emerging farmers and ensuring their essential role in the agricultural sector is recognised and supported.

Key interventions for sector transformation

Addressing these deep-rooted problems requires a collaborative public-private partnership environment that enables and promotes concerted effort from all stakeholders.

Here are some key interventions that could help to foster a more equitable and thriving fresh produce sector:

• Policy reform: Government policies must play a central role in levelling the playing field. This includes strengthening competition law enforcement to prevent anti-competitive practices and creating a regulatory environment that supports smallholder farmers.

• Infrastructure investment: Investing in rural infrastructure is critical. This means improving roads, storage facilities, and market infrastructure to reduce post-harvest losses and facilitate market access for farmers.

• Inclusive market development: Creating more inclusive market systems is vital. This could involve promoting alternative market channels, such as farmers' markets and community-supported agriculture, and encouraging retailers to source produce from small-scale farmers.

• Empowerment and inclusion: Special attention must be paid to the inclusion of marginalised groups, particularly women. Addressing gender inequalities in access to land, finance, and markets is crucial for unlocking the full potential of the sector.

South Africa's fresh produce sector has the potential to be a powerful engine for inclusive growth and development. By addressing the systemic challenges and fostering a more equitable environment, we can create a sector that not only feeds the nation but also empowers its most vulnerable citizens.

“At Kagiso Trust, we believe transforming South Africa’s fresh produce sector requires a systemic approach. Through our SED work, we support emerging farmers via policy engagement, aggregator partnerships, catalytic funding, and inclusive infrastructure solutions.

"We are enabling access and building towards a more inclusive and resilient food system," says Quinton Naidoo, head of socio-economic development, Kagiso Trust